Wellington, August 20, 2018
The Government is freezing MP salaries and allowances for a year while developing a fairer formula for future pay increases.
The Remuneration Authority is due to make a decision on MP pay shortly.
Cabinet approves move
Prime Minister Jacinda Ardern said that the Cabinet agreed today to freeze the salary and allowances of MPs until July 2019 and to reassess the funding formula used by the Authority to ensure it is fair and in keeping with this Government’s expectations and values.
“I have notified all party leaders of this decision,” she said.
Workplace Relations and Safety Minister Iain Lees-Galloway said that the Government needed to take action before the Remuneration Authority initiated new pay rates.
Remuneration Authority informed
“Because of the timing of the annual increase process set in the Act, we need to use an urgent legislative process, aiming for introduction in September. This means we need to amend the Remuneration Authority Act 1977 to suspend new Determinations by the Remuneration Authority and restore the 2017 Parliamentary Salaries and Allowances Determination until 30 June 2019,” he said.
State Services Minister Chris Hipkins has advised the Remuneration Authority that the Government wants to change the law in time to avoid their latest recommended pay rise.
The freeze will apply to MPs’ salaries, superannuation subsidies and expense allowances.
It will not affect certain services such as accommodation, travel and international travel, because these services relate to the differing requirements of roles that MPs and Ministers may perform.
If the personal benefits of some MPs increase between now and June 2019, they could see a reduction in salary, because personal benefits are offset against salary under the Act.
(Picture of Jacinda Ardern Supplied)